DirecTV pact keeps TiVo at bay

Duo renew ad deal

NEW YORK — TiVo and DirecTV are making nice — sort of.

Satcaster said Wednesday it has reupped its deal to jointly sell ads with TiVo through 2010 and said it will continue to support existing customers who use TiVo through that time.

But DirecTV will continue to sell its own DVR service, not TiVo, to new digital-recorder customers.

Move remains a bitter pill for TiVo, the bulk of whose 4.5 million subs come from DirecTV, as more customers continue to sign up for the satcaster’s DVRs. DirecTV spokesman Robert Mercer said the satcaster would push its own box because “we believe what we offer is better,” although TiVo’s technology has generally received more acclaim.

TiVo has been losing customers ever since cable companies began offering DVRs to digital subs. Company said in a recent call it would be pushing service to analog customers and also inked a deal with Comcast in which the cable operator would offer its service.

TiVo’s survival, experts believe, could hinge on whether it wins a patent lawsuit against EchoStar being argued in a Texas courtroom. TiVo alleges EchoStar stole its recording technology; if it wins, it would improve TiVo’s leverage in negotiating with cable operators as well as increase fees to the firm.

TiVo and DirecTV also announced Wednesday that TiVo had agreed not to sue the satcaster over other patents, allaying concerns that the EchoStar battle would be reprised.

TiVo, which pioneered ad-free viewing, ironically also sells ads, in a bid to recoup the cash lost when subs moved over to DVRs.

Company has a deal with both DirecTV and Comcast in which each partner keeps the money from ads it brought in.

In its most recent fiscal year, company had revenue of $196 million and had a loss of about $37 million. Both numbers were double-digit improvements over the previous year.